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r WINDOW SIGNS announcing cut prices on prescription drugs could become com• monplace, if the United States Department of Justice had its way. See story. Justice Dept. Wants II Restraints 6n Rx Ads I 16 • Interpreling the News AO ERICAN DRUIbG'~T • $epiemblelr 7I 797C

AMERICAN DRUGGIST THE A\TITIa-ST DIVISION of the t-. S. Dept of ]ustice believe,, that state laws and regula- tions w•hich restrict prescription drug advertising should be repealed. It has called on the Council of State Governments to take steps in this direction. Composed of representatives of all states, the Council publishes an annual listing of "Suggested titate Legislation", which has considerable inflnence in state capitol~,. Roland W. llonnem, director of policy planning of the justice Dept Antitrust Dirision, also singled out prescription ad restrictions as special targets for action in recent addresses before the American Bar Assn and the Assn of State Attorneys (Jeneral. 'Artificially high': According to Mr. Donnem, about 29 states, "either bv statute or regulation, generally prevent the advertising of prescription Eliminated f drug by name or price, and about 10 prohibit the use of ternTs such as 'discount', 'cut-rate', and so forth in the advertising of prescription drugs." NIr. Donnem claimed that "the principal effect of restricting drug advertising is sharp curtailment of price competition, with resulting stabilization of retail drug prices at artificially high levels. In view of the alarming rate of recent increases in generil health costs, which fall especially hard upon the elderly and the poor, it seems that sound economic artld social ,poliqv dictate I,tllat, am. il competitive re- straints which have the effect of raising drug co,: should be kept to the minimum required by consi,l- erations of public safety. "Thus, w•e suggest that the states, which bear a portion of the burcten of high drug prices under the \Iedicaid program, re-examine the essential premise upon which the advertising restrictions are based : that is, that the advertising of pres:~rip- tion drugs will endanger the public health \'t e are inclined to believe that the premise is largely er- roneous. Other restraints: :\Ir. Donnem also wants the states to take action against what he described as "other market restraints affecting the retail drug industry". He cited "such things as the laws and regulations which limit drug store ownership to pharmacists, require that establishments sellinz drugs at retail be managed by pharmacists, regtt- late the number of pharmacists which must be em- plwryed. car eslxabii~lT tllzt ptllarmacists. maist be ol- duty during a store's open htnus-ever,i if the plTar- macy section is closed. "In addition to the requirements affecting own- ership, management and employment, some state laws and regulations directly affect operations in other ways. For example, there are state provisitmz~ which require the physical separation of the retai'' drug department from the non-drug area of a more general merchandise store, mandatory separate en- trances to drug and non-drug areas, prohibitions on self-service as to non-prescription drup, pro- hibitions on membership or 'closed-door' opera- tions, and control over the content of extcrnal identifying signs." In Nlr. llonnenl's view, "w•hile investigation may show specific law•,, or regulations to be justified by health or safety considerations, ts, the restraint~, mentioned here seem to nnclulv interfere w•ith coni- petition," i AMERICAN DRUGGIST • September 7, 1970 Inlerprebnc thP Ne- • 17